Member Info for Valuation-it-is

DR A and Kenny

You will have noticed that 10 units are going to need grants of €132.5m and ( ...the remaining funding will be provided in the form of equity from Hydrogen Utopia International with the assistance of the London Stock Exchange licensed broker firm Turner Pope."
That is a lot higher -despite the benefit of saving on land purchase (1 site not 10) than the £8m per stand alone single site unit that has been discussed on this board . Looking more like €15m per pop, with a saving on site buying.

Telephoneman 15.17
That made me smile.
He is filtered out, so I will not know, but can imagine the steam the old ramper is building up.

Normally it is he who pays the piper who calls the tune, so what do you mean by
"with Peel back up"?
In the PHE Peel situation, it appears to be Peel calling the shots as PHE have
(had to?) put in capital to get Protos to move forward.

Hopefully "the next countries" will have Protos to look so that would not be a concern. But to continue with your response...
If it came to it, I doubt if it is possible to hand back £100k and rip up the agreement.
If the providers of finance want either skin in the game or an up and running asset with a settled down set of data, then what can PHE do? It does not have a source of income yet, so the pressure would be on PHE. That is unless there are binding commitments on licensees to take up a number of DMG units by a given date or similar. I am not aware of the contents of PHEs licences. Do you have any info on that?

Dr A 16.55 That may be PHE's plan, but look at it from the point of view of those asked to put in £xm per DMG unit AND pay £500k per annum. They do not have an up and running DMG unit to see or take data from. So they are being asked to run a huge risk.
They will want skin in the game.
PHE looks as if it has been forced into putting in capital by Peel. The same considerations apply in Poland.
Would you put in 132.5m without an up and running unit to see? and just test data to go on, with the key man about to retire? I think not. It is a dream situation for us as investors in PHE, but it seems too good to be true. And I think it is. I think PHE may be forced to either wait until there are 6 months worth of data from Protos to show the Poles, or be forced to put in risk capital to get things going. The exclusive has been granted, it would be interesting to know if the licensee has time sensitive performance criteria to attain. If not, the exclusive rights holder can bide his time........

Good point Kenny. €132m is being applied for in 3 parts.......
The announcement states :-"In order to help building the first plant, Hydropolis United with the collaboration of Konin applied for EUR 12 million under the EU Innovation Grant. In order to build the first centralised DMG centralised plant EUR 60 million is to be applied for from the Just Transition Fund which will be matched by funds from the Polish Government under the JUST Transition fund terms of Government matching funds."

So it is Hydropolis United sp. z o.o. we need to look into not Hydrogen Utopia.

The "poland" link on Hydrogen Utopia's website leads to Hydropolis United sp. z o.o - a page under construction.
It also states- "We have applied for a grant of 12.5 million Euros under the EU Innovation Grant to develop a Powerhouse (AIM:PHE) DMG plant to turn plastic into hydrogen and electricity. Depending on the success of the EU funding application process, the remaining funding will be provided in the form of equity from Hydrogen Utopia International with the assistance of the London Stock Exchange licensed broker firm Turner Pope."
So it seems an equity raise may be needed if the EU doesn't come up with €xm.
Very encouraging, but its not in the bag. And those asked to put in Millions, may want to see PHE put some skin in the game - as I suspect Peel have done.
What do you think Kenny?

Very useful DR A, thanks.
I do not know Mr White and have not met him. I did see a video of him being interviewed and he came across as a genuine well motivated person. But I have been hoodwinked in the past so am wary of being too trusting. But if he manages to pull together commitments for partial funding for 10 DMG's in Poland, I think he might be tempted to return to PHE and ask to be bought out. From PHE's point of view, it would internalise the whole thing giving control rather than having an arms length customer to deal with. As an example, suppose HU were to delay their project start - it might cost HU nothing but would play havoc with PHE's planning, share price, forecasts cash flow etc.
Also PHE have the listing and capital raising ability, which HU do not appear to have..... More sense in using PHE's capital therefore.
Mr White may have very altruistic motives. He may think that his time is better spent moving on to another country to try to set up project financing for another DMG cluster, rather than do all the hard graft of setting up the site/business etc. in Poland, all of which may be better suited to PHE skills.
If Mr White did get say 80% of the necessary funding, and then got stuck, I think he would approach PHE to take a stake (i.e.funding the remainder) to get the project going. (A bit like what I suspect has happened with Peel)
In short, I think we should be wary of assuming £5m pa is in the bag. We could find PHE needs to raise more capital to get Poland going.......i.e. a cash outflow.

Careful everyone...............
Anyone checked out Hydrogen Utopia? 2 people+ Howard White (Big PHE shareholder following W2T sale to PHE)
Have they got any money?
Have they got any employees?
Have they done anything in hydrogen before?
And importantly what is their plan?

HW appears to have sold W2T (Waste to Tricity- which had UK rights to DMG ) to PHE Summer last year? He is now in Hydrogen Utopia's (HU) team list. HU is said to have excusive rights to DMG in Poland.
It appears this may be a copy of the evolution of the past UK situation.
What is the plan for Hydrogen Utopia? Get permissions from Poland (done?) and cash from the EU and then sell back the exclusive rights to DGM in Poland and the development to PHE ? Or is it to hand over €5m per annum to PHE? The former makes HU a lot of money perhaps, the latter makes PHE some money. Which is it?
Any thoughts anyone?

https://www.telegraph.co.uk/business/2021/02/10/hydrogen-powered-cars-built-wales-siemens-support/

Come on Peel, what are you waiting for? 75 DMG around the country ASAP please.

Thanks for the link - a good post
A welcome submission but could have been in plain English rather than for example:-
"The challenge for Powerhouse technology remains that the footprint of the plastics are not being apportioned through the value chain – and this challenge may need addressing."
Does that mean - the cost of clearing up waste plastic should be spread between the users of the plastic?
I would have thought it was better if PHE received the total cost of clearing up the plastic, rather than distributing it to the users of the plastic.

And I had the impression the DMG gasification process produced little/no CO2 gas................ so why this comment from PHE?.......
"Powerhouse Energy believe that CCS is an important technology that is essential if we are to decarbonise transport. Government must provide incentives for investments in CCS if this is to be commercially viable. "
Again surely this is working against PHE's business model? If CCS is provided with subsidies as suggested, then the DMG process which produces little or no CO2, will become relatively less attractive?

I wonder when this was submitted, and whether the other messages it contains had hopefully already been delivered to Kwasi Kwarteng long ago.

An incentive to the BoD is described thus:-
"50% on the third anniversary of the date of grant subject to the total market capitalisation of the Company being 50% higher on the third anniversary of the date of grant compared with the market capitalisation of the Company at the date of the grant."

What a useless incentive. All the board have to do to trigger that is to issue more shares in a discounted placing; which would not be in our interests.

The options should vest if the share price has performed, excluding the impact of share consolidations.
Who is chair of the remuneration committee? - They need to be replaced.

https://find-and-update.company-information.service.gov.uk/company/07028940/filing-history
and
https://logikdevelopments.com/about-us/
I will let you make up your own mind.

Well spotted newbs88.

It sounds as if PHE directors should be on the phone the Saudi Public Investment fund.

You will find a lot of useful investor information in the latest placing circular which is free to download. Follow this link and scroll down
https://www.velocys.com/investors/financial-information/

Another boost.
Headline in FT article 3 hours ago
"The price of carbon in Europe has soared above €38 a tonne for the first time as traders rush to secure supplies of EU emissions allowances."

aandi Mon 23.00 The analyst's forecast growth rate slowing is probably more to do with the way analysts produce their forecasts. Normally analysts only take into account what has been announced, leaving the un-announced potential out. So because little of the potential for 21 is left out of the nearer forecasts the growth rate for 21 may look higher than that for 22. The reality could be very different as all the announcements made during 2021 will result in revisions for 22 and 23 as and when those announcements appear. So, the estimates we see for 21 are conservatively realistic, whilst those for 22, and 23 highly likely to underestimate the eventual outcome. Not therefore a negative IMO.

Interesting post, thanks

Did you see Shell came out of its partnership with VLS recently? It appears to have decided to move forward with its own Fischer-Tropsch technology projects on its own.

Markrops Re Sat 22:45

I too initially understood the cost was around £8m, but the size of the DMG units has been increased so the cost is now probably a lot higher. There may be some economies of scale, but under the licencing model, each of PHE's customers will be ordering for themselves, so it may be that the scale economies are a benefit for the manufacturer rather than PHE's customers.

If you set a "stupidly low sell order",
it will be likely your shares will be sold!

Gadzuric Well spotted and thanks for the link.
I agree about the potential, but I think the figures you have for a 1% share of the market are for turnover i.e. the £11.23m as per slide 18 of 30. A 50% margin would be £5.615m, but is that gross margin or net? Admin etc costs? Then financing costs, tax etc. perhaps £2m PAT? Multiple 30-60x mkt cap £60m-£120m in December?
The market Cap immediately post placing in February will depend on where the share price settles but lets say pre placing it was £11m then add placing proceeds of £3m . The posting before yours, below, suggests it was over-subscribed, so the share price may not drop towards the 1.75p placing price. Looks like a £15m ish mkt cap post placing to me, so it still has multi bagger potential..............
The presentation looks good/exciting.